Can't find what you are looking for? Usethe advanced search
11Oct2004
First Bulgarian Equity Fund Reports 19% Return
ADVANCE INVEST (BSE: ADVANC) – the first Bulgarian open-ended equity fund – reported today 19.04% annualized return for the first 6 months following its IPO. The fund debuted with an issue price of BGN 1.05, and the current price is BGN 1.15. The fund’s NAV has almost doubled since inception, while the number of fund shareholders has increased tenfold.
“ADVANCE INVEST has the highest return among all Bulgarian-based funds for the last 6 months,” said Daniel Ganev, Portfolio Manager of the fund. “Our adherence to the fund’s key objective, which is to seek long-term capital appreciation through investment in equity securities in Bulgaria and other East European emerging markets, is paying off.”
Karoll Capital Management, whose team has extensive emerging markets experience, manages the fund’s portfolio and distributes its shares. The firm expects the fund’s assets to surge substantially due to four principal advantages: professional management, high growth potential, liquidity, and tax exemption. ADVANCE INVEST is gaining popularity not only in Bulgaria, a country of eight million people that is to join the European Union in 2007, but also with foreign investors who bet on the potential of the “second wave countries.”
The investment funds of the “first wave countries” experienced an average annual asset growth of 50% over the five years preceding EU accession. Growth has been even stronger in Bulgaria, where assets have nearly doubled in 2004, buoyed by a constantly broadening public interest. The number of both balanced funds and equity funds is set to rise, as there are currently only two such funds on the market. In comparison, balanced and equity funds represent approximately half of all EU funds.
The improving public investment culture, rising household incomes and savings, and declining bank deposit rates indicate that a mutual funds boom is imminent in Bulgaria. In order to retain clients who seek high returns, commercial banks have had to introduce alternative investment products. For instance, certain Bulgarian-based banks have already started distributing foreign fund units. Several major foreign investment companies have set foot on the Bulgarian market, and this should contribute to the development of the Bulgarian asset management industry.
EUR 1 = BGN 1.9558 (currency board)
